Over the last few years, developments around the participant experience for benefits administration services have been focused on helping employees become more effective consumers as they make their benefit selections (the “consumerization” era). In 2016, the next stage of evolution of the participant experience emerged as suppliers shifted their focus to utilization (the “benefits optimization” era).  

NelsonHall’s latest market analysis study of the North American benefits administration market identifies three optimization approaches that are beginning to take shape:

• “Health and wellness” optimization: ensuring participants are not over-insured in major medical and/or underinsured in other ancillary benefit products
• “Financial wellness” optimization: helping participants with financial issues beyond retirement preparedness, such as budgeting, debt management, saving for emergencies, etc.
• “Health & wealth” optimization: ensuring participants have the best health coverage that they can afford while also adequately saving for retirement.

To date, providers that have started initiatives around benefits optimization have tended to focus on narrow optimization approaches, i.e. “health and wellness” and “financial wellness”, based on the vendor’s specific core strength. Some examples include:

• Mercer leverages a ‘best match’ tool, and once a participant makes a selection, other options are then brought forward to fill in gaps in coverage
• Empyrean’s recommendation tool bundles different packages of products together that make sense for the individual based on the participant’s profile
• Fidelity Investments launched Plan for Life Financial Wellness as well as a student debt program that includes a student debt management tool for DC administration participants
• Empower Retirement partnered with DoubleNet to help DC administration participants pay bills, pay down debt, and save for emergencies.

Optimizations around the broad “health & wealth” approach are currently immature, with several suppliers including Alight, Conduent, and ADP planning to launch initiatives around this approach in the future.

With consumer-shopping concepts now table stakes for the participant experience, suppliers need to up their game, since benefits optimization will be the new standard for the participant experience. In addition to delivering on the narrow optimization approaches in the near future, vendors need to turn their attention towards the broader “health & wealth” approach for a holistic view. Separately, providers also need to determine a strategy for how they will deliver a “hyper-personalized” participant experience over the next three years.